|
on Labor Markets - Supply, Demand, and Wages |
| By: | Yuan An; Andrew Garin; Brian K. Kovak |
| Abstract: | How does a task-level minimum pay requirement for gig workers affect their earnings and employment? We study this question in the context of a January 2024 law in Seattle that establishes a per-task minimum pay standard for app-based delivery workers. Drawing on novel cross-platform, trip-level gig activity data, we compare earnings and employment trajectories around the implementation of the law for workers who were doing delivery work in Seattle before the reform against workers who had been active in other regions of Washington State. We find that the minimum pay law raised delivery pay per task, though the increases in base pay per task were partially offset by a substantial reduction in average tips, a major component of delivery pay. At the same time, the policy led to a reduction in the number of tasks completed by highly attached incumbent drivers (but not an increase in exit from delivery work), completely offsetting increased pay per task and leading to zero effect on monthly earnings. We find evidence that drivers experienced more unpaid idle time and longer distances driven between tasks, but find no evidence that drivers reduced their total time working on delivery apps and only limited evidence of switching from delivery to ride-hailing work. Using a simple model of the labor market for platform delivery drivers, we show that our evidence is consistent with free entry of drivers into the delivery market driving down the task-finding rate until expected earnings return to their pre-reform level. These findings highlight the challenges of raising pay in spot markets for tasks where there is free entry of workers. |
| JEL: | J22 J23 J31 J38 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34545 |
| By: | Borgonovi, Francesca (OECD); Checchi, Daniele (University of Milan); Gualtieri, Valentina (INAPP – Institute for Public Policy Analysis) |
| Abstract: | This paper estimates labour-market returns to formal and informal human capital in Italy using data from the first cycle of PIAAC. We distinguish formal inputs (years of schooling) from directly assessed skills (literacy and numeracy) which we interpret as distinct forms of human capital that are shaped by school quality and by non-formal and informal learning. To address non-random employment and joint endogeneity of schooling and skills, we combine a Heckman selection model with instrumental variables. Schooling is instrumented using cohort exposure to the 1971 introduction of full-day primary schooling and the 1999–2001 Bologna ‘3+2’ university reform; skills are instrumented using gender- and cohort-specific municipal illiteracy rates from population censuses, matched by birthplace. Results show that ignoring selection and endogeneity overstates the returns to schooling. After correction, numeracy yields the main wage premium, while formal credentials contribute little once skills are accounted for. The findings highlight the role of early cultural environments and skill accumulation for Italian wage inequality in Italy. |
| Keywords: | credentials, schooling, skill, Italy |
| JEL: | J24 I26 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18355 |
| By: | Christos Makridis; Christos A. Makridis |
| Abstract: | Technological change has repeatedly disrupted creative labor markets, raising concerns about whether new tools substitute for artists or shift the organization of creative work. This paper studies how occupational exposure to generative AI (genAI) maps into employment and earnings outcomes for U.S. artists following the unanticipated release of ChatGPT. I combine an occupation-level LLM task exposure index with establishment-based occupational outcomes from the Occupational Employment and Wage Statistics (OEWS) and individual microdata from the American Community Survey (ACS), estimating event-study specifications that compare more versus less exposed artistic occupations from 2017 to 2024. Across datasets, I find little evidence of short-run earnings declines associated with LLM exposure through 2023, with point estimates near zero and in some specifications modestly positive. Evidence on employment is more mixed, with weaker employment growth in 2023 for more exposed artistic occupations in some specifications. To investigate mechanisms, I use the Gallup Workplace Panel from 2023 to 2025 to measure AI use directly and relate changes in AI use to job satisfaction and burnout. Within-person estimates show limited average well-being effects of adoption, but suggest heterogeneous responses for artists and a use pattern concentrated in ideation and creative-support tasks. The results are consistent with early task reallocation than immediate labor-market harm, while leaving open the possibility of medium-run adjustment as adoption deepens and complementary investments accumulate. |
| Keywords: | artificial intelligence, arts, culture, creative economy, large language models, generative AI, skills dynamics, workforce |
| JEL: | J23 J24 L82 O33 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12368 |
| By: | Joanne Lindley (King’s Business School, King’s College London, Bush House, Aldwych, London, WC2B 4B, UK); Steven McIntosh (School of Economics, University of Sheffield, Sheffield S10 2TU, UK) |
| Abstract: | This study investigates the relationship between worker-reported job quality characteristics and both work-related wellbeing and labour productivity, utilizing data from the European Working Conditions Surveys (EWCS) of 2005 and 2015, and the European Working Conditions Telephone Survey (EWCTS) of 2021. We construct composite Job Quality Scores (JQS) for wellbeing and productivity based on 24 key job quality characteristics, weighted by their correlation with each respective outcome. Our analysis reveals a divergence in trends between 2015 and 2021, with average JQS for work-related wellbeing significantly declining while the JQS for labour productivity increased. By decomposing the changes, we identify specific job quality characteristics, such as increased repetitive hand/arm movements, working at high speed, carrying heavy loads, and working to tight deadlines, as key drivers of this opposing trend. Conversely, increased computer use, reduced physically demanding postures, appropriate reward for effort, and reduced exposure to dangerous chemicals are identified as factors that could simultaneously enhance both productivity and wellbeing. Furthermore, we explore the role of occupational shifts in explaining these changes, finding that the observed increases in key job characteristics listed above are largely occurring within occupations rather than solely due to changes in occupational composition of the workforce. These findings offer valuable insights for managers seeking to balance economic performance with worker wellbeing, highlighting specific areas for intervention to foster a more harmonious and productive work environment. |
| Keywords: | Job quality, wellbeing, productivity, occupations |
| JEL: | J20 J21 J24 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:shf:wpaper:2025013 |
| By: | Christos A. Makridis |
| Abstract: | Motivated by large structural shifts in the nature of work since 2020, this paper studies the allocation of time among workers across jobs that vary in their remote intensity. Drawing on the American Time Use Survey between 2018 and 2024, I document three main results. First, time allocated to leisure increased and to work decreased among more remote jobs with little change in home production, shopping, or childcare. These results are robust to alternative longitudinal data from the Gallup Workplace Panel between 2019 and 2025. Time allocated to commuting declined, but only accounts for a small portion of the declines in labor supply. Second, these changes were concentrated among males, singles, and those without children. Third, these declines in labor supply are not associated with productivity declines; sectors with greater remote work intensity exhibited greater productivity growth. I subsequently build and estimate an augmented Roy model, showing that sorting of more productive workers into higher productivity industries accounts for the increase in productivity growth. |
| Keywords: | leisure, remote work, time use, wages, working from home |
| JEL: | D13 D23 E24 G18 J22 M54 R3 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12363 |
| By: | Barham, Tania (University of Colorado, Boulder); Cadena, Brian C. (University of Colorado, Boulder); Schechter, Lauren (University of Notre Dame) |
| Abstract: | This paper studies the effects of a supported work program that provides TANF recipients with a suite of services including a six-month subsidized internship with a local employer. We use rich administrative data and implement a stacked difference-in-differences design comparing program participants to observably similar TANF recipients to estimate effects on employment, earnings, and benefit receipt. Program enrollment led to an immediate increase in formal-sector employment and earnings, with limited post-program fadeout. The program increased employment by 10 percentage points (20 percent) and earnings by \$861 per quarter (48 percent) in the three years following program exit. Program participation also increased participants' total benefit receipt during the program, with modest decreases after program exit. The program is relatively cost-effective compared to other adult subsidized employment programs due to longer-than-average persistence of the employment and earnings gains. |
| Keywords: | active labor market programs, TANF, subsidized employment, staggered difference-in-differences |
| JEL: | J24 J68 I38 H43 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18342 |
| By: | Katarzyna Segiet (Statistics Norway) |
| Abstract: | Firms increasingly contract out a wide range of activities that were previously done in-house, such as cleaning, security, logistics, and catering. This paper provides evidence on the impact of outsourcing on workers' earnings and possible reasons that firms outsource by estimating panel data and event study models using Norwegian administrative data. Workers who become outsourced experience large earnings declines, which are driven by reductions in working hours. Firms are likely to outsource to reduce costs and reduce rigidity in contractual working hours, which is possible as contractor firms operate on lower non-wage costs and have more workers with less than full-time contractual working hours. |
| Keywords: | Domestic Outsourcing; Subcontracting |
| JEL: | J24 J31 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:ssb:dispap:1030 |
| By: | Mundra, Kusum (Rutgers University); Bagheri, Omid (Kent State University) |
| Abstract: | Using various years of data from the National Survey of College Survey we examine the earnings of work visa immigrants who entered the U.S. during the various H-1B cap periods and whether the cap was binding or not at the time of their entry. For work visa entrants in the non-academic sector as well as from cap bound countries, we find that earning premium relative to college graduate natives ranges between 17%-25% if the immigrants entered the U.S. during the initial period of H-1B and during the later binding cap periods. This premium is lost if immigrants first entered on H-1B during the non-binding period. Compared to pre 1990 work immigrants we find there is a drop in earnings for immigrants who entered on H-1B during the non binding period. This is not seen in the academic sector and for five cap exempt countries, where cap is not relevant. Our findings are driven by the H-1B program involving staffing agencies hiring of low ability workers and workers facing wage suppression with limited job mobility. Work visa entrants may also face scarring in the labor market because of lack of U.S. education experience. We do not find this drop in earning for student visa entrants who are admitted by the university selection process. |
| Keywords: | high-skilled immigrants, visa cap, H-1B, earnings |
| JEL: | J61 J24 J31 J1 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18321 |
| By: | Blau, Francine D. (Cornell University); Cohen, Isaac; Comey, Matthew (Cornell University); Kahn, Lawrence M. (Cornell University); Boboshko, Nikolai (Cornell University) |
| Abstract: | Using 1979-2019 Current Population Survey data, we study the effect of state and federal minimum wage policies on gender, race, and ethnic inequality. We find that minimum wages substantially reduce intergroup wage inequality at least up to the 20th wage percentile, with no evidence of adverse employment effects. We conduct counterfactual simulations of between-group inequality due to minimum wage changes since 1979. Declines in the real minimum wage in the 1980s slowed progress in narrowing between-group inequality. Relatively small changes in minimum wages during 1989-1998 and 1998-2007 meant little role for the minimum wage over those time spans. Since 2007, several states have steeply raised their minimum wages, especially raising Hispanics’ relative wages, because they earn low wages and reside disproportionately in those states. Finally, we find that raising the federal minimum wage to $12/hour in 2020 dollars ($14.49 in 2025Q2 dollars) would reduce existing between-group wage gaps below the 15th percentile by 25-50%. |
| Keywords: | Hispanic-White wage gaps, race wage gaps, gender wage gaps, wage differentials, wage distribution, minimum wage, wage inequality |
| JEL: | J15 J16 J31 J38 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18345 |
| By: | Martin E. Andresen; Andreas R. Kostøl; Ross T. Milton; Corina Mommaerts; Luisa Wallossek |
| Abstract: | This paper examines monthly earnings volatility and its transmission to household earnings volatility using Norwegian data on the universe of monthly pay histories. We document substantial month-to-month earnings changes: within a job, while over one-quarter of months have no earnings changes, another quarter have at least a 23% change. Accounting for multiple jobs and non-employment increases volatility, while aggregating to households reduces volatility by 12-35%. Event studies around job loss and couple formation, along with decomposition and bounding exercises, show that most of this decline reflects pooling effects rather than sorting or responses to shocks. |
| JEL: | D13 D31 J12 J31 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34563 |
| By: | Giulia Klinges; Alain Jousten; Mathieu Lefebvre |
| Abstract: | Over the years, the Belgian social security system has undergone substantial reform with a prime focus on increasing older worker labor force participation. The paper explores the effect of past reforms on inequality in old age. We distinguish two separate effects: The mechanical effect considers the change in inequality and expected benefit levels due to the reforms for a fixed retirement age distribution. The behavioral effect accounts for the endogenous change caused by changes in the incentives to work. Our results show that mechanically, reforms have led to losses in expected benefits for all but the lowest income quintile. Behavioral changes had a positive but orders of magnitude smaller effect. Overall, inequality decreased as a result of reforms. |
| JEL: | D63 H55 I38 J26 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34579 |
| By: | Xiao Ma; Marc-Andreas Muendler; Alejandro Nakab |
| Abstract: | Export activity shapes workers’ experience-wage profiles. Using employer-employee and customs data for Brazilian manufacturing, we document that workers' experience wage profiles are steeper at exporters than at non-exporters and, among exporters, steeper at exporters shipping to high-income destinations. We develop and quantify a model featuring worker-firm wage bargaining, export-market entry by multi-worker firms, and human capital accumulation by workers to interpret the data. Human capital growth can explain one-half of the differences in wage profiles between exporters and non-exporters. We show that increased human capital per worker can account for one-half of the overall gains in real income from trade openness. |
| JEL: | E24 F12 F14 F16 J24 J64 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34580 |
| By: | Stefan Leknes (Statistics Norway); Jorn Rattso (Department of Economics, Norwegian University of Science and Technology); Hildegunn E Stokke (Department of Economics, Norwegian University of Science and Technology) |
| Abstract: | Intangible capital, an asset class central to the knowledge economy, has been shown to contribute substantially to productivity growth. However, the importance for agglomeration economies has received limited attention. We examine how the agglomeration effect varies with industries’ intensity of intangible capital, combining international measures of industry-level intangible capital with rich Norwegian administrative employer–employee data. The analysis addresses methodological challenges related to endogenous intangible investment, unobserved worker characteristics, and correlation between worker moves and firm quality. We find that at mean intangible intensity, the elasticity of wages with respect to city size is 0.026, with each standard-deviation increase in intangible intensity raising the elasticity by 0.004. Dynamic wage returns to city-specific experience are also significantly higher in intangible-intensive industries. Employing the AKM framework and a complementary firm- based measure of local productivity, we show that our main results are robust to potential hierarchy effects arising from worker mobility. Moreover, we document that positive selection on unobserved ability into large cities is driven primarily by workers employed in intangible-intensive industries, irrespective of education level. We further document heterogeneity across intangible components, showing that agglomeration elasticities are strong for industries intensive in software and databases, and economic competencies. Taken together, these findings highlight the importance of intangible capital investments in shaping urban wage premia. |
| Keywords: | Agglomeration economies, knowledge spillover, intangible capital, AKM-model, sorting, worker experience |
| JEL: | J24 J31 J61 R12 R23 |
| Date: | 2025–12–19 |
| URL: | https://d.repec.org/n?u=RePEc:nst:samfok:20425 |
| By: | Mehrotra, Santosh (University of Bath); Sarkar, Kingshuk (affiliation not available) |
| Abstract: | India introduced sweeping legal changes on labour laws in late 2025, summarising 29 laws into 4 labour Codes. The Key Changes and Concerns Industrial Relations Raises the threshold for requiring government permission for layoffs/retrenchments from 100 to 300 workers, encouraging firms to avoid permanent employees; Introduces "sole negotiating union" requiring 51% worker support; Imposes 14-day notices and prohibitions during conciliation, making legal strikes impossible Wages: Introduces unclear "floor wage" concept without adequate distinction from minimum wage; Lacks mechanism for revising the basic wage component based on changing consumption patterns; Social Security: Maintains 10-worker threshold for provident funds and benefits, excluding most unorganized sector workers; Misses opportunity to universalize social security as a legislative right Occupational Safety: Covers only establishments with 10+ workers, excluding smaller workplaces; The codes represent missed opportunities for genuine labor reform, avoiding issues like job security, collective bargaining rights, fair minimum wages, gender discrimination, and social security - especially for majority of India's workforce in the informal sector. |
| Keywords: | labour law, India, occupational health, social security, minimum wages, industrial relations |
| JEL: | J08 J38 J52 J53 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izapps:pp218 |
| By: | Jiarui Nan (School of Economics, University of Sheffield, Sheffield S10 2TU, UK); Gurleen Popli (School of Economics, University of Sheffield, Sheffield S10 2TU, UK) |
| Abstract: | This paper examines the determinants of the urban-rural wage gap in China within the framework of segmented labour markets. Using nationally representative data from the China Family Panel Studies (2014–2022), we employ Oaxaca–Blinder decomposition at the mean, and Recentered Influence Function (RIF) regression across the wage distribution. A key contribution of this study is the use of alternative definitions of urban and rural status, based on hukou registration and geographic residence, allowing us to capture both institutional and spatial dimensions of inequality. The results show that mean wage disparities are largely explained by compositional differences, particularly in education and access to formal contracts, reflecting segmentation between distinct rural and urban labour markets. Yet rural workers also experience significant lower returns to education. Quantile decompositions reveal that the wage gap widens at higher percentiles, where unobserved or institutional disadvantages become more pronounced, for both men and women. Overall, the findings demonstrate that China’s urban-rural wage inequality reflects both unequal endowments and structural segmentation. The definition of “urban” and “rural” critically shapes interpretation and policy implications. |
| Keywords: | return to education, China, wage gap, regional differences, decomposition, recentered influence function, segmented labour markets |
| JEL: | J42 J24 R23 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:shf:wpaper:2025015 |
| By: | Dreier, Lukas (University of Jena); Göthner, Maximilian (University of Twente); Lawson, Cornelia (University of Manchester) |
| Abstract: | Academically trained scientists play a pivotal role in innovation by advancing the knowledge frontier across industries, prompting firms to increasingly engage in proactive recruitment. This paper investigates academic scientists’ career transitions into industry by jointly examining two often separately studied mechanisms: scientists’ intentions to leave academia (the supply side) and firms’ recruitment efforts (the demand side). We conceptualize intersectoral mobility as the outcome of how these two mechanisms align or diverge. Using survey data from 469 scientists in Germany linked to follow-up information on their actual career outcomes more than three years later, our results show that exit intentions are the predominant predictor of subsequent transitions into industry jobs. Job offers reinforce the impact of existing exit intentions. By contrast, scientists who receive a job offer but do not intend to leave academia are the least likely to transition to private-sector employment. Implications for firms’ active recruiting strategies and for universities seeking to retain scientific staff are discussed. |
| Keywords: | exit intentions, knowledge transfer, industry transition, career mobility, academic scientists, job offers |
| JEL: | J63 O31 J24 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18347 |
| By: | Fuchs, Larissa (affiliation not available); Heinz, Matthias (University of Cologne); Pinger, Pia (University of Cologne); Thon, Max (University of Cologne) |
| Abstract: | We conduct a randomized controlled trial (RCT) with a leading technology firm to study how highlighting flexibility and career advancement in job advertisements causally affects the applicant pool. Highlighting career advancement increases the number of applications from men for entry-level positions and attracts additional applicants with strong qualifications and a good fit, which in turn leads to more interview invitations. By contrast, highlighting flexibility increases applications from both women and men at the entry level but provides limited evidence of attracting higher-quality or better-fit applicants. A complementary survey experiment among STEM students shows how job advertisements shape beliefs about the firm’s job characteristics and work environment. Overall, our results show that the amenities firms choose to highlight can powerfully influence both the size and characteristics of their applicant pool. |
| Keywords: | gender, job advertisements, field experiments, hiring |
| JEL: | M51 M52 D22 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18310 |
| By: | Benner, Niklas (RWI - Leibniz Institute for Economic Research); Heuer, Felix (RWI - Leibniz Institute for Economic Research); Kamb, Rebecca (RWI - Leibniz Institute for Economic Research); Storm, Eduard (Institute for Advanced Studies (IHS), RWI) |
| Abstract: | How do economic crises reshape firms’ skill demand through changes in the organization of work? Using the COVID-19 pandemic as a shock to workplace practices, this paper examines whether short-term disruptions prompt lasting shifts in job requirements. We draw on 11 million German online job vacancies from 2017–2024 and implement an event-study design that exploits pre-pandemic variation in workfrom- home feasibility across occupations. This approach identifies firms’ differential exposure to remote-work constraints based on the occupational mix of their job postings. We find that crisis-induced shifts in skill demand were mainly short-lived, but one adjustment persisted: a lasting rise in interactive requirements, reflecting the emergence of hybrid collaboration. This form of organizational change contrasts with the technology-driven automation emphasized in prior crises and was shaped mainly by structural factors —digital infrastructure, firm size, and sectoral exposure —rather than by cyclical variation. Our results show that temporary shocks can trigger selective and enduring shifts in firms’ skill demand through evolving workplace organization. |
| Keywords: | Online Job Ads, Skill Demand, Work-from-Home Feasibility, COVID-19, Task Reallocation, Event Study |
| JEL: | J23 J24 J63 O33 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:ihs:ihswps:number62 |
| By: | Xiao Ma; Marc-Andreas Muendler; Alejandro Nakab |
| Abstract: | Export activity shapes workers’ experience-wage profiles. Using employer-employee and customs data for Brazilian manufacturing, we document that workers’ experience-wage profiles are steeper at exporters than at non-exporters and, among exporters, steeper at exporters shipping to high-income destinations. We develop and quantify a model featuring worker-firm wage bargaining, export-market entry by multi-worker firms, and human capital accumulation by workers to interpret the data. Human capital growth can explain one-half of the differences in wage profiles between exporters and non-exporters. We show that increased human capital per worker can account for one-half of the overall gains in real income from trade openness. |
| Keywords: | export activity, wage profiles, human capital accumulation |
| JEL: | E24 F12 F14 F16 J24 J64 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12350 |
| By: | John M. Barrios; Brian C. Fujiy; Petro Lisowsky; Michael Minnis |
| Abstract: | We examine how differences in financial reporting practices shape firm productivity. Leveraging new audit questions in the U.S. Census Bureau's 2021 Management and Organizational Practices Survey (MOPS), and complementary tax return data from the Internal Revenue Service (IRS) and detailed financial records from Sageworks, we find that (i) variation in reporting quality explains 10--20 percent of intra-industry total factor productivity dispersion, and (ii) evidence of complementarity between the effects of financial audits and management practices driving firm productivity. We then examine the underlying mechanisms. First, audits function as a managerial technology, improving the precision of internal information and raising efficiency, with stronger effects in competitive, low-margin industries and among younger firms. Second, exploiting cross-state variation in tax incentives, we show that audits constrain underreporting and mitigate the downward bias in measured productivity. Together, these results highlight the underrated importance of financial reporting quality driving firm productivity. |
| JEL: | D15 D24 G3 L2 M20 M4 M41 O33 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34536 |
| By: | Freundt, Richard; Novella, Rafael; Rosas-Shady, David |
| Abstract: | Digital transformation is reshaping labor markets, increasing demand for advanced digital skills and creating new employment opportunities. This document provides a thematic review of robust impact evaluations of interventions aimed at improving labor market outcomes in the context of digital transformation. It focuses on three key areas: advanced digital skills programs, programs to improve online labor market outcomes, and emerging methodologies in training delivery. Despite growing policy interest and global investment in these programs, robust causal evidence remains scarce. Available studies suggest that advanced digital skills programs can facilitate transitions into technology-related occupations and, in some settings, increase labor earnings. However, consistent effects on overall employment are not observed, and high costs and selective entry criteria may limit scalability. Similarly, programs designed to improve online labor market outcomes reveal both opportunities and constraints: while many participants gain initial access to digital platforms, success is often short-lived without strong technical skills and support. New training delivery models, including MOOCs and mobile-based or AI-driven approaches, offer potential for scale but face persistent challenges related to low completion rates, accessibility, and cost-effectiveness. |
| Keywords: | digital skills training;Online labor market programs;Innovative training |
| JEL: | E24 J24 J48 M53 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:idb:brikps:14426 |
| By: | Sascha O. Becker; Hartmut Egger; Michael Koch; Marc-Andreas Muendler |
| Abstract: | This paper links globalization, worker efficiency, and wage inequality within plants to internal labor market organization. Using German plant-worker data and information on the task content of occupations, we document that larger plants (i) use more occupations, (ii) assign fewer tasks per occupation, and (iii) exhibit greater wage dispersion. We develop a model where plants endogenously bundle tasks into occupations, improving worker-task matching at the cost of higher fixed span-of-control costs. Embedding this into a Melitz framework, we show that trade increases worker efficiency and wage inequality in exporting plants, whereas non-exporting plants experience the opposite effects. Structural estimation and simulations confirm the model’s predictions and point to non-monotonic economy-wide effects. |
| JEL: | F12 F16 J30 L23 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34549 |
| By: | Marco Fongoni |
| Abstract: | This paper advances a theory of unemployment hysteresis—transitory shocks leave permanent effects—based on a model of endogenous path-dependent wage rigidity under incomplete employment contracts. Workers’ relative wage comparisons—incumbents’ aversion to wage cuts and new hires’ concern with pay inequality—imply wage increases are partially irreversible, generating path dependence and asymmetry in wage adjustments. During recessions, hiring wages fail to adjust fully downward, depressing job creation and producing hysteresis effects and large unemployment fluctuations. A quantitative assessment shows that these effects can be significant under plausible calibrations of the cost of wage cuts and the sensitivity of workers to relative wages. A 1% transitory shock can generate a permanent increase in unemployment of about 0.5% to 15%, with benchmark values around 1.5–5.5%. The paper concludes by discussing the implications of the theory for the effectiveness of monetary policy and the empirical research on hysteresis effects, suggesting promising directions for future research. |
| Keywords: | incomplete contracts; wage rigidity; irreversibility; hysteresis; unemployment |
| JEL: | E32 E52 E71 J23 J30 J60 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:aim:wpaimx:2540 |
| By: | Pietro Biroli; Amalia Di Girolamo; Giuseppe Sorrenti; Maddalena Totarelli |
| Abstract: | Educational disparities often limit students' access to relatable role models, constraining their aspirations and educational outcomes. We design and implement the Online Role Model Mentoring Program (ORME), a scalable, low-cost intervention connecting middle school students with successful role models from similar backgrounds. Using a randomized controlled trial with over 450 students in Campania, Italy, we find that ORME improves students' beliefs about the returns to effort, increases alignment between aspirations and expectations, and boosts school effort. Treated students also become more academically ambitious: they are more likely to enroll in academically oriented tracks and perform better on standardized language tests. These findings show that brief online mentoring sessions can have a meaningful impact on students’ attitudes and choices at a critical stage of schooling, highlighting a promising tool to support students in low-opportunity contexts. |
| Keywords: | role models, aspirations, mentoring, school interventions |
| JEL: | I21 I24 J24 D91 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12342 |
| By: | Elena Prager |
| Abstract: | Until recently, antitrust laws were rarely enforced in labor markets. Although the existence of labor market power has long been recognized, evidence only recently emerged that such market power regularly arises from sources that are actionable under antitrust law. Since 2010, antitrust agencies have substantially increased labor market enforcement actions. However, many questions relevant to enforcement remain unanswered, such as how to conduct market definition for labor markets, and how best to incorporate concentration into models of the labor market. This article reviews how antitrust is beginning to be used in labor markets, the evidence for and against its use, and the remaining evidence gaps standing in the way of more effective use. |
| JEL: | J42 K21 L4 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34572 |
| By: | Inna Abramova; John M. Barrios |
| Abstract: | Private equity (PE) has moved rapidly into professional services, yet its impact on accounting, where licensing regimes, reputational capital, and partnership governance traditionally limit external ownership, remains poorly understood. We examine how PE ownership alters the organization and market structure of accounting firms using data from 1999-2024 that link more than 3, 600 PE transactions to detailed information on mergers and acquisitions (M&A), labor markets, and audit pricing. PE investment increases sharply after 2020 and extends to both CPA-licensed audit firms and non-CPA advisory practices, with most activity in large mid-tier PCAOB-registered firms. After PE entry, firms grow faster: non-audit revenues rise, employment expands, and cross-state M&A accelerates, consistent with platform-building and consolidation. These adjustments have market-level implications. PE investment raises labor-market concentration in key accounting occupations and drives up ERISA audit fees in a standardized setting, as confirmed by a synthetic difference-in-differences design. Our results reveal a key tension at the core of professions: preserving independence and competition in a market increasingly driven by financial capital. |
| JEL: | G23 G34 J44 L2 L4 L84 M4 M41 M42 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34575 |
| By: | Matthew Freedman; Noah Arman Kouchekinia; David Neumark |
| Abstract: | The Opportunity Zone program was designed to encourage investment in distressed communities across the United States. Early research found no evidence of impacts of the program on employment, earnings, or poverty of zone residents, but some evidence of positive effects on employment among businesses in zones. Using the latest survey-based as well as administrative data, we adopt a longer-run and more comprehensive perspective on the labor market impacts of OZs. We find that OZ designation increases job creation among businesses within zones. However, a large share of the newly created jobs in zones is offset by declines in nearby low-income communities. While we detect gains in OZ resident employment over the longer run, the increase comes from jobs with workplaces outside of OZs that, in light of the changing demographic composition of zones, are likely held by new as opposed to existing residents. Overall, our results suggest that OZs have limited benefits for existing residents of targeted areas and are associated mainly with a spatial reallocation of jobs and households. |
| JEL: | J2 R1 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34589 |
| By: | Ester Faia; Edward L. Glaeser; Saverio Simonelli; Martina Viarengo |
| Abstract: | What explains the dramatic differences in earnings across locations? We employ an administrative employer-employee linked dataset from Italy that includes the country’s entire workforce to estimate firm-worker or location-worker effects. We also estimate differences in human capital accumulation across firms and cities. We find that the elasticity of the location premia to density is smaller than in other settings and that other locational characteristics, such as segregation in school or the workplace and inter-generational mobility, are more strongly correlated with earnings and earnings growth. Our place-based estimates are similar if we focus on movers who were forced to relocate after the L’Aquila Earthquake. Using a regression discontinuity design, we find that density levels jump up at the historic border between House of Savoy-ruled Piedmont and the Hapsburg Empire. Earnings today also jump at the border. This finding suggests that there may be some unintended effects of being a far-flung province of a distant empire, perhaps because of access to larger markets or the administrative and educational reforms that began under Empress Maria Theresa. |
| JEL: | J31 J61 N93 R10 R23 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34582 |
| By: | Hu, Shengrong (Iowa State University); Winters, John V. (Iowa State University) |
| Abstract: | The Optional Practical Training (OPT) program now provides up to 36 months of employment authorization for foreign students completing college degrees in the U.S. in science, technology, engineering, and math (STEM) fields. Econometrics and Quantitative Economics (EQE) was added as a STEM field in 2012, triggering an explosion of EQE programs and degrees conferred, but some of this growth involved displacement from other economics programs. We document the growth of EQE and examine effects of OPT and EQE program creation on overall economics bachelor’s degrees conferred to international students. We find positive effects on international economics degrees with effects that appear larger at public colleges and universities than private ones. We also examine effects on domestic students and find more mixed results. Our results suggest that EQE program creation on average benefits foreign students and higher education institutions. |
| Keywords: | economics, college education, immigration policy, STEM |
| JEL: | A22 I23 J24 J61 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18336 |
| By: | Kerwin Kofi Charles; Konstantin Kunze; Hani Mansour; Daniel I. Rees; Bryson Rintala |
| Abstract: | This paper provides direct evidence that members of a disfavored group adjust their economic behavior in response to prejudice. We exploit plausibly exogenous, localized increases in anti-Arab and anti-Muslim sentiment generated by combat fatalities of U.S. service members from a given state during the wars in Iraq and Afghanistan between 2001 and 2014. Linking detailed records on military fatalities with survey data, we estimate the causal effect of these shocks on the labor supply of Arab and Muslim men residing in the affected states. Following a home-state fatality, Arab and Muslim men reduce their weekly hours of work by approximately one percent relative to the baseline sample mean. The reduction is twice as large among the self-employed and concentrated in occupations requiring frequent customer or co-worker interaction. These patterns are consistent with avoidance-based sorting predicted by prejudice-based models of discrimination. The timing of the response coincides with short-lived increases in anti-Muslim hate crimes, confirming that the estimated effects reflect shifts in prejudice rather than broader economic conditions. Our findings provide direct evidence that prejudice can distort market outcomes by inducing targeted individuals to withdraw from interactions with prejudiced market participants. |
| JEL: | J15 J7 R31 R32 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34526 |
| By: | Böckerman, Petri (University of Jyväskylä); Jysmä, Sami (Labour Institute for Economic Research); Kanninen, Ohto (LABORE Labour Institute for Economic Research) |
| Abstract: | This paper introduces the Difference-in-Kinks (DiK) design, an econometric framework that extends the standard regression kink design to settings in which the slope of a policy rule varies over time. By combining the key features of the regression kink and difference-in-differences approaches, the DiK design identifies causal effects from variation in kink intensity over time. We formalize both sharp and fuzzy versions of the estimator and derive the identification conditions under a parallel-trends assumption. Applying DiK to Finland’s 2011 guarantee pension reform demonstrates that changes in marginal incentives significantly increased the probability of retirement, while the standard regression kink design would have obtained implausibly large estimates in the opposite direction. The DiK design thus offers a flexible framework for policy evaluation in dynamic, nonlinear environments. |
| Keywords: | policy evaluation, difference-in-differences, regression kink design, causal inference, treatment effects |
| JEL: | C21 C14 J26 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18313 |
| By: | Erten, Bilge (Northeastern University); Stiglitz, Joseph E. (Columbia University); Verhoogen, Eric (Columbia University) |
| Abstract: | The CHIPS and Science Act, enacted in August 2022, is a key element of the revival of U.S. industrial policy. We examine the short-term employment effects of the act. Drawing on quarterly industry-by-county data from the Quarterly Census of Employment and Wages (QCEW), we implement two county-level difference-in-difference designs, the first comparing counties with pre-existing semiconductor facilities to other counties with high-tech industries and the second comparing counties with semiconductor fabrication facilities (which were targeted for the bulk of the CHIPS funding) to counties with non-fabrication semiconductor facilities. Using both approaches, we find robust, positive employment impacts in affected counties. The effects began at the time of the passage in the Senate of a precursor bill, in anticipation of the signing of the CHIPS Act. Our preferred estimates suggest an increase of 110 jobs per affected county in the first design and 180 jobs per affected county in the second design. Simple back-of-the-envelope calculations suggest national direct employment effects of approximately 15, 000-16, 000 jobs in the core semiconductor sector and indirect effects of 28, 000-35, 000 jobs in related sectors. |
| Keywords: | semiconductors, industrial policy, employment |
| JEL: | L52 L63 J2 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18334 |
| By: | Deng, Zichen (University of Amsterdam); Luo, Weixiang (Fudan University, China); Plug, Erik (University of Amsterdam); Yu, Jia (Peking University) |
| Abstract: | We document, for the very first time, the relationship between earnings and sexual orientation in China. Using data from the 2020 Chinese Private Life Survey, we find that gay men earn significantly less than comparable heterosexual men, with the largest penalties for rural-hukou holders and among men reporting exclusive same-sex attraction. Lesbian women tend to earn more than heterosexual women, but the differences are small and mostly insignificant. The estimates for bisexual men and women are uniformly insignificant. We conclude that the gay penalties and lesbian premiums in China, albeit imprecisely estimated, mirror those observed in Western labor markets and are most consistent with explanations based on conventional gender norms and intra-household specialization. |
| Keywords: | earnings, sexual orientation, China |
| JEL: | D10 J10 J15 J30 J70 O10 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18317 |
| By: | Ahammer, Alexander (University of Linz); Halla, Martin (Vienna University of Economics and Business); Heckl, Pia (Ifo Institute for Economic Research); Winter-Ebmer, Rudolf (Johannes Kepler University Linz) |
| Abstract: | Long-term unemployment among older workers is particularly difficult to overcome. We study the impacts of a large-scale job guarantee program that offered up to two years of fully subsidized employment to long-term unemployed individuals aged 50 and above. Using a sharp age-based discontinuity in eligibility, we find that participation increased regular, unsubsidized employment by 43 percentage points two years after the program ended. The gains are driven by transitions into new firms and industries, rather than continued subsidized employment, and we find no evidence of displacement effects for non-participants or spillovers to family members. The program had no measurable short-run health effects. |
| Keywords: | subsidized employment, temporary job guarantee, long-term unemployment, health status |
| JEL: | J64 J08 J78 I14 H51 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18322 |
| By: | Arcidiacono, Peter (Duke University); Gyetvai, Attila (Banco de Portugal); Maurel, Arnaud (Duke University); Jardim, Ekaterina (Amazon) |
| Abstract: | This paper applies some of the key insights of dynamic discrete choice models to continuous-time job search models. Our framework incorporates preference shocks into search models, resulting in a tight connection between value functions and conditional choice probabilities. In this environment, we establish constructive identification of the model parameters, including the wage offer distributions off- and on-the-job. Our framework makes it possible to estimate nonstationary search models in a simple and tractable way, without having to solve any differential equations. We apply our method using Hungarian administrative data. Longer unemployment durations are associated with lower offer arrival rates, resulting in accepted wages falling over time. Counterfactual simulations indicate that increasing unemployment benefits by 90 days results in a 14-day increase in expected unemployment duration. |
| Keywords: | dynamic discrete choice, identification, job search |
| JEL: | J64 C31 C41 J31 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18309 |
| By: | Samuel Berlinski; Guillermo Cruces; Sebastian Galiani; Paul Gertler; Fabian Gonzalez |
| Abstract: | We study the long-run effects of a large public expansion of pre-primary education in Argentina. Between 1993 and 1999 the federal government financed the construction of new preschool classrooms targeted to departments with low base- line enrollment and high poverty, creating roughly 186, 000 additional places. We link administrative records on classroom construction to four population censuses and estimate difference-in-differences models that compare treated and untreated cohorts across high- and low-construction departments. An additional preschool seat per child increases post-kindergarten schooling by about 0.5 years, raising the probability of completing secondary school by 11.9 percentage points and of enrolling in post-secondary education by 7.1 percentage points. For women, access to the program also reduces completed fertility: an additional seat lowers the number of live births per woman by 0.18, and we find no evidence that selective migration biases these estimates. We find little impact on labor-market outcomes at the census date, consistent with beneficiaries still being in school or in the early stages of their careers. A benefit-cost analysis based on the estimated schooling gains, standard Mincer returns, and observed construction and operating costs yields a benefit-cost ratio of about 11 and an internal rate of return of 13%. Our findings show that universal at-scale pre-primary expansions in middle-income countries can generate sizable improvements in human capital and demographic outcomes at relatively low fiscal cost. |
| JEL: | J13 J16 J38 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34552 |
| By: | Braulio Britos (InternationalMonetaryFund); Manuel Hernandez (International Food Policy Research Institute); Danilo Trupkin (Universidad de San Andrés) |
| Abstract: | International migration has surged in recent years, especially from rural areas in developing countries. This paper examines how agricultural distortions contribute to these emigration patterns and affect welfare, using Guatemala as a case study. A structural model with agricultural and non-agricultural sectors, estimated with micro and aggregated data, shows that distortions drive emigration among more productive agents and cause factor misallocation, diminishing overall productivity and incomes. Reducing distortions to the most efficient departments lowers emigration by 2.3 points and raises agricultural productivity by 30.1% and median welfare by 4.5%. High-distortion areas are more isolated and lack institutional and financial access. |
| Keywords: | Agricultural distortions, Emigration, Labor mobility, Productivity, Welfare |
| JEL: | O15 O13 J24 J61 R23 Q1 O40 I31 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:sad:wpaper:174 |
| By: | Hu, Yan (Department of Economics, Copenhagen Business School); Maurer, Stephan (University of Edinburgh,) |
| Abstract: | Do minorities benefit from social networks? In this paper, we study this ques-tion using the historical example of China’s first modern bureaucratic organization, the Chinese Maritime Customs Service. Drawing on newly digitized personnel records from 1876-1911, we first show that the Chinese clerks employed by the service were predomi-nantly Cantonese. Using the plausibly exogenous transfers of clerks across stations, we then estimate that a non-Cantonese (minority) clerk benefited significantly from meeting at least one colleague from his same province and dialect. Such connections led to faster promotion and a 5.6% salary increase, with even stronger effects when meeting a clerk who was either senior or of high quality. |
| Keywords: | Chinese Maritime Customs Service; Social connections; Wages; Promotion; Minorities |
| JEL: | J15 J31 J45 N35 N75 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:hhs:cbsnow:2025_014 |
| By: | Marianne Simonsen; Lars Skipper; Jeffrey Andrew Smith |
| Abstract: | This paper uses register-based data to analyze the consequences of a recent major Danish welfare reform for children’s academic performance and well-being. In addition to work requirements, the reform brought about considerable reductions in welfare transfers. We implement a comparative event study that contrasts outcomes for individuals on welfare at the time of reform announcement before and after the implementation of the reform with the parallel development in outcomes for an uncontaminated comparison group, namely those on welfare exactly one year prior. Our analysis documents that mothers’ propensity to receive welfare decreased somewhat as a consequence of the reform, just as we observe a small increase in hours worked. At the same time, we do not detect negative effects on children’s short-run academic performance. We do find small negative effects on children’s self-reported school well-being and document substantial upticks in reports to child protective services for children exposed to the reform. |
| Keywords: | welfare reform, child outcomes, Denmark |
| JEL: | I38 J13 J22 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:ces:ceswps:_12369 |
| By: | Antoine Bozio; Maxime Tô; Julie Tréguier |
| Abstract: | This study analyzes the distributional effects of French pension reforms from 1993 to 2014 across different socioeconomic groups. Using administrative data for individuals born between 1934 and 1950, we examine the impact on social security wealth (SSW) across lifetime earnings deciles and genders. Our methodology incorporates differential life expectancy and exploits the PENSIPP model for counterfactual scenarios. Results show that reforms generally decreased SSW across all income groups, with regressive tendencies. The 1993 reform had the most significant impact, reducing SSW by over 15% for men in the lowest earnings decile compared to 5% for the highest. Subsequent reforms had milder effects. These findings contribute to understanding the long-term consequences of pension reforms on inequality and inform future policy decisions in countries facing similar demographic challenges. |
| JEL: | H55 J14 J26 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:nbr:nberwo:34576 |
| By: | Kotsadam, Andreas (Ragnar Frisch Centre for Economic Research); Løvgren, Mette (Oslo Metropolitan University); Moreau, Nicolas (Université de la Réunion); Stancanelli, Elena G. F. (Paris School of Economics); van Soest, Arthur (Tilburg University) |
| Abstract: | We study how working from home links to gendered attitudes about household work and childcare. Using a vignette experiment embedded in a regular Dutch population representative survey, we randomly vary the gender of the partner working from home in a hypothetical dual-earner couple. When presented with various routine and emergency chores, respondents, on average, agree that the partner working from home should execute them. These effects are significantly larger when the vignette randomly depicts a man, rather than a woman, working from home, but these gender differences in respondents’ expectations vanish in a scenario where no partner works from home. All in all, the evidence gathered indicates that Work from Home may blast rather than boost gender norms around household work and childcare. |
| Keywords: | gender norms, household work, work from home, vignette |
| JEL: | D13 D83 J16 J22 M54 |
| Date: | 2025–12 |
| URL: | https://d.repec.org/n?u=RePEc:iza:izadps:dp18324 |